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British Gas fined £2.5m for complaint handling failures

Energy regulator Ofgem is also investigating Npower and EDF Energy over the way they handle customer complaints.

 
British Gas fined £2.5m for complaint handling failures

Energy giant British Gas has been fined £2.5 million for serious failures in the way it deals with customer complaints, Ofgem revealed today.

The energy regulator found British Gas had breached regulations by:

  • failing to re-open complaints when the customer indicated the complaint had not been resolved.
  • failing to inform customers with details of the redress service provided by the Energy Ombudsman.
  • failing to put in place an adequate process for dealing with complaints from small businesses

Sarah Harrison, Ofgem’s senior partner for sustainable development, said: ‘We warned the industry in March that we would be backing up our plans to reform the retail market with a tough approach to enforcement’.

‘This £2.5 million fine against British Gas, and the other £10 million of fines imposed on the energy industry so far this year, sends a clear message to energy companies that they must abide by the rules,’ she added.

Richard Lloyd, executive director at Which?, meanwhile said: 'It’s time energy companies started taking customer complaints seriously, and Ofgem is absolutely right to hand down substantial punishments to those that don’t follow basic procedures. 

'Ofgem should now follow the lead of the financial services industry and regularly publish data on complaints, broken down by each company,' he added.

The fine comes less than a month after Ofgem hit British Gas with a £1 million fine for misreporting the amount of electricity it supplied under the government's renewables obligation.

Ofgem is also currently investigating Npower and EDF Energy over complaint handling procedures. Scottish and Southern Energy, EDF Energy, Npower and Scottish Power meanwhile are under investigation for mis-selling, while Scottish Power is also answering questions in relation to potentially misleading marketing and differences between its standard credit and direct debit tariffs.

Shares in British Gas’ parent company Centrica (CNA.L) traded down 3.8p at 322p this morning. The energy giant releases its interim results tomorrow – last year its parent company made a pre-tax profit of £2.8 billion.

Scottish and Southern Energy (SSE.L) meanwhile is today’s biggest faller on the FTSE 100 – dropping 73p to £13.29p.

9 comments so far. Why not have your say?

Tony Peterson

Jul 27, 2011 at 12:53

Hasn't anybody noticed that SSE has gone ex (a very healthy) dividend today?

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sgjhaghsdg

Jul 27, 2011 at 12:55

Yes, SSE was the biggest faller, but it just went EX DIVIDEND so 52.6p of that drop is down to that and that alone. Take that away and SSE has only dropped 1.4%, which is just daily noise.

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sgjhaghsdg

Jul 27, 2011 at 13:02

Drat, I need to learn to type faster. :-)

I suspect most investors know about ex dividend dates, and their effect on share prices., but this is about the third report in the financial press that I have read today where the author either didn't know SSE went ex divi or chose not to mention it.

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Potus

Jul 27, 2011 at 13:24

I have always regarded British Gas as one evil empire we can't do without...However, what's £2.5 Million to them ? We are going to pay the fines anyway !

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David Harvey

Jul 27, 2011 at 15:35

quite right Potus and it will just end up on our bills anyway. Why doesn't this government fine itself for letting energy companies hold the country to ransom ? Just when we need inflation down and to be helping companies to keep going.

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Peter Wilkinson

Jul 27, 2011 at 20:01

A "Fines" system that included 20% (or more) of the CEO share options going to worthy charity might put a spark in the right direction.

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hengist

Jul 27, 2011 at 23:02

I belong to an investment club where 90% of the members do not understand that BG who sell them their gas & lecky are nothing to do with the quoted BG. It is Centrica whoi have been fined. BG is a great resources company.

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kevin sewell

Jul 28, 2011 at 08:02

who gets the money from the fine paid by british gas?

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Robin McEvoy

Jul 28, 2011 at 10:47

I get so incensed about massive fines on companies. These are incurred by individuals not doing what they should do but are paid by customers (in increased bills), and/or shareholders. Most likely no-one in the company takes any sort of hit, and no doubt still gets his/her bonus. The fines should be man-sized, not company-sized, and directed at the individuals who did wrong. Like the MD, for running a loose ship. And checks should be made that the company does not make up the difference.

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